Paramount sale, Cedar Fair interest no secret

Thursday, 25 May 2006

But top executives kept quiet to avoid insider-trading conflicts.

By BRANDI BARHITE
brandibarhite@sanduskyregister.com

SANDUSKY - Cedar Fair didn't have to be hush-hush with its latest acquisition.

Because CBS announced it was accepting bids for its Paramount Parks division, employees were aware of Cedar Fair's interest, said Dick Kinzel, president, chairman and chief executive officer of Cedar Fair.

It wasn't a big secret like when the partnership was pursuing Geauga Lake in 2004, he said.

When Geauga Lake was purchased, it wasn't known by the public the park was for sale, according to Stacy Frole, director of investor relations at Cedar Fair.

"Six Flags didn't come out and say this is for sale," Frole said Wednesday. "A lot of acquisitions are like that."

Top executives involved with the sale had to stay quiet to prevent a leak, which could have affected stock prices and trading. Employees weren't notified by voice mail until the morning the acquisition was announced.

It was especially important because two publicly-traded companies were involved and no one wanted illegal insider trading, or the appearance of it, Kinzel said.

In the case of Paramount, Cedar Fair employees still had to stop trading once its interest was made public, Frole said.

Cedar Fair has an insider trading policy that prevents employees from trading when they have material information not available to the public, she said. It's also dependent on who the employee was and what role he or she played in the transaction, Frole said.

However, when the $1.24 billion acquisition was announced Monday, it was still a big surprise to most of the employees, Kinzel said.

They were aware the partnership was trying to obtain the parks, but no one knew when, and if, it was actually going to happen, he said. Frole said employees were told how close Cedar Fair was actually getting to receiving the bid.

As of Sunday, Cedar Fair and CBS had a handshake agreement, Kinzel said. Monday morning, the board at CBS approved the $1.24 billion cash purchase.

"I couldn't sleep Sunday night at all," Kinzel said.

In March, Cedar Fair executives went to Charlotte, N.C., home of Paramount headquarters, for a presentation on the parks.

Even before CBS announced the parks were for sale in January, Cedar Fair executives were visiting the parks in case it did come true.

"We always wanted Kings Island -- it's a real jewel," Kinzel said.

Cedar Fair had tried to buy Kings Island in the early 1990s, but Paramount spent more, Kinzel said. This time around, it wasn't an option to buy only Kings Island because CBS always intended on selling all five Paramount Parks, Frole said.

The former owner of Kings Island's, Taft Broadcasting Company, made a play for Cedar Point in the 1970s. Cedar Point wasn't even for sale.

With Paramount Parks, Cedar Fair goes from the world's fifth amusement/theme park chain to third, pushing out Universal Studios Recreation Group and Anheuser-Busch Theme Parks, according to industry publication, Amusement Business.

Kinzel said it's exciting, but he's a little nervous. Acquiring parks while the season is still in operation, is hard, he said.

The transaction is expected to close during the third quarter, possibly during June. Frole said the deal is subject to regulatory anti-trust laws before it can go through.

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